Abstract:

In recent years, an increasing numbers of tax authorities have attempted to estimate the amount of tax that is legally owing to their government but not collected. This amount is commonly referred to as “tax gap” which is the difference between the theoretical tax liability due in accordance with the tax legislation and the actual revenue collected. In the tax structures of many countries, Value Added Tax (ESA95 code D.211) represents a most important source of budgetary revenues, raising about one-fourth of the world's tax revenue. Like other taxes, VAT is subject to risks arising from tax errors and evasions that reduce the scope of the declared, accounted for and collected tax. Estimation of VAT losses is an important tool for their detection and prevention as well as for collection of the right sums of VAT in the right time (European Commission, 2015). This paper considers a range of VAT gap in Slovakia which belongs to the EU countries with the largest VAT gap.